Press release number: IFAD 30/05

Rome - 13 July 2005 - Smallholder farmers living in the Batha region of Chad will benefit from a new development project to increase agricultural production and promote income generating activities through better access to financial services and farming inputs, and training in basic business and financial literacy. The project will be managed by a small light project unit with full participation of rural poor people in project activities implementation and monitoring.

The project is being financed by a US$12.8 million loan and US$400,000 grant from IFAD out of a total project cost of US$15 million. The loan agreement was signed today at IFAD headquarters by IFAD President Lennart Båge and Mr Mahamat Abdelrassoul, Ambassador plenipotentiary of the Republic of Chad in Bonn.

IFAD learned from earlier projects in the country that empowering local communities can enable them to take a central role in planning, designing and implementing village development efforts.

''When poor people are in the driver's seat, they can be extremely effective in implementing activities and teaching what they've learned to others,'' says IFAD country portfolio manager for Chad Luyaku Loko Nsimpasi. ''That's why one of our priorities is building the capacity of local grassroots groups.''

Credit groups alongside with basic training will be one focus of the project. Small groups of five to ten women will form credit associations. By banding together they can pool their resources, helping the poorest women to pay the initial membership deposit. Becoming a member makes a woman eligible for a loan so that she can start her own enterprise, for instance growing garden produce. Training in business and financial literacy will help members to make the most of their savings and investments.

Previous microfinance projects found that members of farmers' groups or unions could be recruited to train others, ensuring communities can take charge of managing their financial affairs even after the project ends. This strategy will be used in the current project.

The remoteness of this region makes it difficult for farmers to obtain seeds, tools and fertilizer, limiting the productive potential of their crops. The project will strengthen existing institutions that distribute inputs by increasing access to information and credit. Where no distribution network exists, the project will promote its creation.

Another way of raising yields of rainfed crops will be to promote small irrigation schemes managed by local groups. This will result in higher yields, thereby increasing incomes.

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IFAD is a specialized agency of the United Nations dedicated to eradicating rural poverty in developing countries. Seventy-five per cent of the world's poorest people - 800 million women, children and men - live in rural areas and depend on agriculture and related activities for their livelihoods. Through low-interest loans and grants, IFAD works with governments to develop and finance programmes and projects that enable rural poor people to overcome poverty themselves.

There are 192 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.5 billion. IFAD has invested about US$2.8 billion in these initiatives. Cofinancing has been provided by governments, beneficiaries, multilateral and bilateral donors and other partners. At full development, these programmes will help more than 100 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested almost US$8.7 billion in 690 projects and programmes that have helped more than 250 million poor rural men and women achieve better lives for themselves and their families. Governments and other financing sources in the recipient countries, including project beneficiaries, have contributed about US$8.4 billion, and multilateral, bilateral and other donors have provided about US$6.9 billion in cofinancing.